4.6.3.1. Change in Carbon Stocks in 1990 as the Reference

For CO2 emissions from fossil fuel combustion and most other categories of
emissions from Annex I countries, the Kyoto Protocol would require that Parties
reduce emissions by some specified amount below emissions levels in 1990. (We
note for completeness that some countries are in fact permitted an increase
in emissions and that, for some countries and some GHGs, an alternate reference
year is permitted.) In application to Article 3.4, this requirement would suggest
that the carbon stock change during the commitment period be compared with the
carbon stock change during the base period (1990).

In mathematical terms, the change in stocks over time is equal to net emissions,
so net emissions are the first derivative of the stocks (the first derivative
of stocks gives the rate at which stocks are changing). The change in net emissions
over time is the second derivative of stocks, which indicates the rate at which
net emissions are changing. The opening line of Article 3.3 suggests that, in
fact, the second derivative of stocks is of interest; this phrase conflicts
with later portions of Article 3.3, however, and has now been officially rendered
meaningless by a decision at COP4 interpreting Article 3.3 (UNFCCC, 1998b).
Nonetheless, some observers believe that our interest should be in the second
derivative of stocks. This conflict has been referred to as the "gross-net disparity"
(IGBP, 1998).

For Parties to whom Article 3.7 applies (i.e., Parties for whom land-use change
and forestry constituted a net source of GHG emissions in 1990), aggregate emissions
and sinks from land-use change in 1990 are to be included in the 1990 reference.
Subtraction of base-year emissions from commitment-year emissions then yields
a true measure of the change in net GHG emissions from the base period to the
commitment period if the same list of activities is included in both calculations-limited
by the "since 1990" stipulation. If the change in carbon stocks in 1990 (or
other base year) is not taken as the reference for Article 3.4 activities, and
if some of the activities brought in under Article 3.4 were significant sources
of GHG emissions in the base year, a qualification such as that in Article 3.7
might be considered. If some of these Article 3.4 activities are defined as
land-use changes, Article 3.7 may be interpreted to apply.

One of the procedural problems with this approach has to do with year-to-year
variability in the natural part of the global carbon cycle, particularly in
the terrestrial biosphere (see Chapter 1). Another difficulty is that retrospectively
determining the rate of change in some stocks may not be technically feasible-restricting
this approach to application only in the future. Although this approach was
rejected in Kyoto, it would most nearly treat emissions from the biosphere in
the same way that emissions from fossil fuel burning are treated, while retaining
the linkage to carbon stocks.

Another issue that has been raised with regard to this approach is the possibility
that best efforts could still result in a net rate of removals that shrinks
with time. As an activity continues over time, it could use all of the land
available (conservation tillage, for example, might become adopted on virtually
all cropland) and/or begin to fill up the ecologically available carbon stocks
(a soil achieves a general equilibrium at a certain SOC level, or a large region
of forests matures and growth rates decline); thus, the rate of change would
begin to decline compared to an earlier period. This issue may be more immediately
germane to project-level accounting-which is more likely to contain a few soil
situations or ecosystem successional phases-but it could become important at
the Party level if aggressive implementation of effective activities were continued
for several decades. The result is that a Party with a declining rate of carbon
sequestration would appear to be a source from an accounting standpoint even
though it was a net carbon sink.